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Credit and debit cards from a local bank or credit union offer incredible convenience. But they#x2019;re vulnerable to loss, theft and fraud.
New technologies are making cards safer, but there are things you may not know about protecting your wealth and security.
#x201c;You need to be vigilant when owning and using credit, ATM and debit cards,#x201d; said Hillsborough County Sheriff#x2019;s Deputy Jeff Merry. #x201c;Much depends upon you paying close attention to your account and your actions.#x201d;
Cardholders need to act fast when reporting loss or theft. It can help limit their liability for charges made by criminals.
#x201c;Immediate reporting before any unauthorized charges are made typically limits your loss to zero,#x201d; he said. #x201c;Reporting within two business days minimizes your liability to $50 but rises to $500 if (more).#x201d;
The key is to check your balance frequently, most typically through online banking services or apps on your smartphone or tablet, Merry continued. Unauthorized transactions usually appear quickly after a loss or theft, most often as a small, innocuous charge such as a soft drink or coffee. And once the criminal determines the card is active, he or she will go for bigger purchases.
Merry cautions residents to be extra careful with phone and online purchases. Inbound calls to your home or wireless phone can be fraudulent.
#x201c;Never, ever, give out your 16-digit account number to anyone who has called your phone,#x201d; he said. #x201c;You can#x2019;t be certain they#x2019;re who they say they are.#x201d;
The Hillsborough County Sheriff#x2019;s Office offers the following tips to protect your card usage:
Don#x2019;t ever disclose your account number over the phone or via email and guard your account information that comes through the mail. Never carry your PIN number in your purse or wallet.
Keep a log of your credit and debit account numbers, expiration dates and security numbers, and know the phone numbers needed to report a loss or theft.
Never sign a charge or debit slip that doesn#x2019;t show a sales amount in dollars.
Review your monthly statements promptly, and carry only the cards you#x2019;ll need.
Security improvements are on the way.
In September, many banks will be introducing the new #x201c;chip cards#x201d; that contain high technology wafers used to encrypt the traditional 16-digit personal account number used in transacting a purchase in a store or ATM.
These new cards, known as EMV cards, generate a unique, one-time code each time it#x2019;s used at a cash register. The code is nearly impossible to discover and duplicate in making fraudulent credit cards.
EMV cards have been successfully deployed throughout Canada and Europe. They have a solid record of helping reduce credit and debit card crime through the encryption process, Merry said.
According to an Aug. 31 report in USA Today, Bank of America has used chip technology in its credit cards since 2012 and began adding chips to debit cards last October. More than 70 percent of Chase Bank#x2019;s credit and debit cards will be converted to the new chip technology by 2016. Card users can learn more about the next generation cards at www.GoCardChip.com.
ATMs and cash registers at large retailers like Target and Walmart will be converted to EMV chip technology within the next two years.
#x201c;Most credit and debit card crime centers around large database breeches through computer invasion at the corporate level,#x201d; Merry said.
On Oct. 1, retailers who have not updated cash registers to acknowledge the new chips will be held liable if there is fraud at the register, he continued. If both the bank and the retailer have updated their technology, the liability falls back to the bank.
For additional information, call Merry at (813) 242-5515.
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Still, this decline is encouraging, he says. It indicates that overall more consumers using credit are managing it responsibly enough to not be among the lowest scorers.
Clearly, Americans are focused on their financial health, and its starting to pay off. When I opened my first credit card, I signed up for freecreditscore.com, because I wanted to learn more about how credit works, says Melissa L. Masters, a San Diego-based public-relations professional. One thing I learned that Ive found people overlook is that you shouldnt close your credit cards -- the greater the average age of your accounts, the better your score.
Another thing Ive seen people do is open multiple cards, because they think having more credit cards will help them, Masters adds. That just drags down the average age of the accounts.
Financial experts say climbing from a 695 FICO score, to one that is 800-and-above, is doable -- you just have to go after it.
The number one thing needed to know for building a better credit score is paying on time every time, notes Andi Wrenn, an Arlington, Virginia-based financial counselor and a specialist in credit and debt management. Get your balances below 30 percent of available credit limits, and have a variety of credit types. This can mean loan, credit card, revolving accounts, and mortgages.
Also, dont close the account that youve held the longest, Wrenn adds. It helps with your credit history, which is very important in your credit score, she says. If you need to build credit, Wrenn also advises getting a small loan of $500 and pay that off in six months time. This shows that you are making payments on time every time and that you can pay back a debt that is owed. Pay down as much debt as possible, she says. The less you owe, the better.
Alex Gerard, a credit card specialist and founder of Cardsmix.com, a credit card data analytics firm, agrees theres no magic bullet to beefing up a credit score. But he does offer a plan for consumers looking to get to the magic 800 FICO mark. The hardest part is to pay off all credit card balances, Gerard says. But you have to clean up to raise your score. Consequently, close all due payments and pay off credit card balances.
Also, improve your types of credit you use to get some diversity. If all your credit is just credit cards -- get yourself an installment loan.
There are a lot of credit builder one-year type of loans on the market, Gerard says.
Then, start working on the credit utilization part of the score. Pay off your balance in full every month, Gerard advises. Use only up to 10 percent of total credit line during the billing cycle. For example, if your total credit limit is $2,000, never use more than $200 on the card. If needed, refill the balance several times a month. Never carry a balance and miss a payment and pay several days in advance. Many credit card experts are less conservative and recommend not exceeding 30 percent of your credit limit before settling a balance.
Do all that and in less than a year, your credit score will be given a large boost, Gerard says.
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WASHINGTON There is a method to what some readers consider my madness.
Some people hate that I hate debt.
Others disagree when I encourage families not to borrow for college.
And, man, do I get a lot of email when I recommend that college students, especially freshmen, not have credit cards.
I value this feedback, so I created the Color of Money Talk Back feature, in which folks provide counterarguments to something Ive written.
I disagree with the idea that credit cards arent important for college students, wrote Sallie of Freeport, Maine. Perhaps if they are going to college near home, that is true. But even for them, I think (credit cards) are good. They provide a safety net.
Lets stop right here.
We should not be teaching young adults that credit is a safety net. Cash is their saving grace. Of course, at some point, having good credit will matter but not in their formative financial years.
Sallie provided an example of when a credit card could be needed.
What if something happens to their parents? she asked. How do (the students) get home?
OK, theres a possibility that both parents could become incapacitated. But how about teaching our adult children to be more resourceful than immediately turning to credit in a crisis? If such a situation occurred, they may have to call upon help from other relatives who have the ability to pay for a train or plane ticket. And hopefully the parents have done some estate planning so that there is an individual who is authorized to access funds that could be used to bring a child home.
A grandchild of mine had her computer destroyed in the middle of final papers, she argued. How to get a new one quickly?
My daughter is a rising junior in college, and she is as tethered to her computer as she is to her smartphone. So I get that a broken computer is a big deal. But colleges have computer labs. Libraries have computers. On a college campus, plenty of other students have computers. Again, lets be wary of scaring young adults into thinking credit is their only choice when things happen.
Sallie also advocated a credit-building strategy that I wholeheartedly discourage.
I gave my children, and now give my grandchildren, a credit card on my American Express (account), she wrote.
Hold on here. Do you fully understand what it means to add someone on your credit card as an authorized user?
This person can benefit from your good credit habits, such as low credit balances and on-time payments. But the reverse is also true. If the primary cardholder doesnt pay the bill on time, that bad history could be reported as well. And an account holder who bumps up against the maximum credit limit could also work against everyone else using the card. Additionally, the strategy of boosting anothers credit may not work. Not all credit lenders report the account history to an added users credit file. However, my biggest issue with adding someone to your card is the fact that they have no obligation to pay the bill.
Sallie said her grandchildren understand that the card is for emergencies and use it as such with periodic other uses for which they have been good about paying me back. Their parents pay me back the other (times), as was the case with the broken computer. Another good thing about this is that I, of course, in getting the bill, get to see what they have used it for.
So a card that was supposed to be only used for emergencies is in fact used for other purchases. That slope is getting slippery.
Heres something else to consider. A recent report of 42,000 first-year college students and how they behave financially found that among the many things they had to deal with in college, they felt the least prepared to manage their money.
And how did they become more confident?
It wasnt by using credit.
Feeling prepared to manage money in college was not related to a students experience with credit cards it actually decreased as they got cards earlier in life, according to the Money Matters on Campus report by EverFi, an education technology company, and Higher One, which partners with colleges and universities to lower administrative costs.
It was experience with managing a bank account that was key in developing independent financial skills, the report said.
Students should master using cash even a debit card long before graduating to MasterCard or Visa. Yes, it may take years to build up exceptional credit. But it only takes a short time of mismanagement to damage it.
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Pine River Capital Management, the $15.5 billion hedge fund firm, hired former Deutsche Bank AG credit trader Joshua Wilkes to expand its municipal debt business, according to a person with knowledge of the matter.
Wilkes was co-head of investment-grade credit and head of municipal trading before he left the German bank in January. He started as a money manager in a new position at Pine River's New York office on Aug. 17, said the person, who asked not to be named because the information is private.
Pine River is expanding its footprint as banks are scaling back their fixed-income and trading teams amid tougher regulations. The firm recently hired Royal Bank of Canada trader Olivier D'Meza, who led a team in the global arbitrage and trading group.
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SEOUL Aug 25 South Koreas household credit marked its fastest annual growth in nearly four years in the April-June period, central bank data showed on Tuesday, showing accelerating growth for a second straight quarter amid record-low interest rates.
Household credit during the June quarter, including loans and other credit owed by South Korean households, was up 9.1 percent on-year, or 94.6 trillion won to a total of 1,130.5 trillion won ($947 billion), the Bank of Koreas preliminary data showed.
The credit expansion accelerated from a revised 7.4 percent growth seen in the first quarter of the year and was the fastest gain since a 9.2 percent rise in the third quarter of 2011.
The quarterly data showed credit growth was led by a 9.5 percent jump in household loans during the June quarter from a year ago, compared to a 7.7 percent rise in the previous three-month period.
Household borrowing has been on a steady rise as the Bank of Korea lowered its policy rate four times since last year to its current record-low of 1.50 percent to battle sluggish economic activity.
South Koreans have been taking advantage of low interest rates as well as changed government policies aimed at boosting real estate transactions to buy houses, resulting in a swift rise in household loans.
The Bank of Korea has said it is closely monitoring changes in household borrowing, and the government unveiled a modest set of measures last month aimed at curbing the rise in debt.
Meanwhile, the same data showed the outstanding amount of purchases on credit, which also makes up a part of the household credit balance, rose 3.5 percent by the end of June on-year.
This sped up from a revised 3.3 percent rise at the end of March but was slower than a 5.0 percent gain at the end of the third quarter of 2014. ($1 = 1,193.9500 won) (Reporting by Christine Kim; Editing by Eric Meijer)